Yum China Holdings Inc. (YUMC, Financial) experienced a notable price increase today, surging by 7.77% following the release of its third-quarter 2024 financial results. This positive movement comes at a time when the stock had already seen some recent declines from its 52-week high.
In the third quarter, Yum China expanded its footprint by opening over 400 new restaurants, bringing its total number of locations to nearly 16,000. Despite a 3% decline in same-store sales, the company's overall revenue saw a year-over-year increase of 5%, driven by the new openings. This revenue boost supported a 15% rise in operating profit, now at $371 million.
Yum China has also announced a substantial return of profits to its shareholders, planning to allocate $1.5 billion in 2024 through share buybacks and dividends. Furthermore, the company's commitment to shareholder returns has been enhanced, with a revised target of returning a total of $4.5 billion from 2024 through 2026, up from the previously planned $3 billion.
From an investment perspective, Yum China (YUMC, Financial) is currently valued at $48.57 per share. The company has a market capitalization of $18.45 billion and a price-to-earnings ratio (P/E) of 23.46. Despite facing some challenges, Yum China maintains a strong Altman Z-Score of 3.64, indicating solid financial strength. Additionally, the stock has a Beneish M-Score of -2.31, suggesting it is unlikely to be involved in financial manipulation.
Yum China's GF Value, assessed by GuruFocus, indicates that the stock is "Modestly Undervalued," with a GF Value estimation of $61.29. For more detailed insights into Yum China's valuation, you can check the GF Value page.
In terms of dividends and growth, Yum China's dividend yield stands at 1.26%, with a significant dividend growth rate of 16% over the past year. The company has also demonstrated consistent revenue growth, showing resilience amidst a volatile market environment.
Overall, Yum China's strategic expansion and commitment to shareholder returns position it as a compelling investment opportunity, supported by its strong financial metrics and growth prospects.
